Freelancers' faith in UK economy wanes

Freelancers’ faith in the economy appears to be diminishing, in line with their expectations that contracts will be harder to come by and their revenues more likely to reduce.

In fact, the Freelancers’ Confidence Index shows that whereas 70% of freelancers thought in the first quarter that the economy would improve, only 59% are now confident that it will.

Although that means a majority of such self-employed workers still think an economic uptick is incoming for the UK, the chunk of them expecting a decline has almost doubled.

Specifically, only 8 per cent of freelancers in the first three months of this year believed the nation’s economic performance would worsen, compared with 14.8% currently.

Their gloomier outlook isn’t confined to the economy. In particular, the proportion of freelancers forecasting a turnover drop is at 22%, up from 11.9% in the previous quarter.

But fortunately, the stock of them that expected to be better off due to increased sales has, roughly, stayed the same, unlike their confidence in contract availability, which is abating.

Asked by the index authors PCG about the contract pipeline, 13% of the freelancers predicted a drying up; about 41% said it would stay the same and roughly 45% anticipated a surge.

While positive-sounding, this indicates a tightening from the first quarter. Then, a majority (52%) foresaw more contracts; 38% expected no change and only 9 per cent envisioned a reduction.

“A slight decline in freelancer confidence from last quarter is possibly down to the expectation of increased competition”, said PCG’s economics expert Georgios Nikolaidis.

“[This is] driven by the increase in the number of independent professional freelancers in the labour market which has risen by 13.5% between 2011 and 2013.”

The pile of contracts seen to be reducing could also be down to the freelancers increasingly taking the contracts – 73% of the respondents were ‘on contract’ in Q1, compared with 81% in Q2.

As to why they have less faith in the economy, Mr Nikoladis pointed to anticipation over an interest rate hike combining with an expectation that the UK’s recovery will "slow down."

He said domestic and global uncertainty may have also dampened freelancers’ spirits for the year ahead, the latter part of which such professionals expect to see their costs increase.

For now though, the freelancers’ bottom lines are intact, as they reported little or no change in their day rates and, more positively, have healthy pay expectations for the next 12 months.

The Freelancer Confidence Index is a quarterly survey of mainly private sector freelancers who comprise the main membership of the PCG. The respondents were selected using a randomised sample and cover the entire United Kingdom.

Featured Freelancers